Refer to the diagram. At P 3 , this firm will:
A. produce 14 units and realize an economic profit.
B. produce 62 units and earn only a normal profit.
C. produce 40 units and incur a loss.
D. shut down in the short run.
C. produce 40 units and incur a loss.
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Suppose that the supply of insulin is perfectly elastic and the demand for insulin perfectly inelastic. Then the result of an excise tax would be
A. a significant increase in government revenue and a significant decrease in the quantity consumed. B. a significant decrease in the quantity consumed with no change in government revenue. C. a significant increase in government revenue and no change in the quantity consumed. D. no increase in government revenue and no change in the quantity consumed.
The bond supply curve slopes up because
A) interest rates rise as bond prices rise. B) when bond prices are high, inflation is high. C) the lender is willing and able to offer more bonds when the price of the bond is low. D) the borrower is willing and able to offer more bonds when the price of the bond is high.
The law of demand states that, other things equal:
A. price and quantity demanded are inversely related. B. the larger the number of buyers in a market, the lower will be product price. C. price and quantity demanded are directly related. D. consumers will buy more of a product at high prices than at low prices.
If the credits for a principles of economics section is three units and an instructor teaches two sections with 100 students in each and tuition and fees at your school are $500 per credit hour, then the marginal revenue product for your school from hiring that instructor that semester is:
A. $500. B. $1500. C. $150,000. D. $300,000.